Bourse at 1-week high on JKH; pressure on rupee eases

Friday, 12 July 2013 00:01 - - {{hitsCtrl.values.hits}}

Reuters: The stock market hit a one-week high on Thursday, led by market heavyweight John Keells Holdings after it revealed plans to build a multi-million dollar luxury resort. The main share index rose 0.77%, or 46.33 points, to 6062.38, the highest close since 4 July. Keells, Sri Lanka’s biggest conglomerate, said late on Wednesday it had submitted a plan to the Government to build the luxury resort worth more than $ 650 million that would include hotels, shops and apartments. Two hours after the trading started on Thursday, Investment Promotion Minister Lakshman Yapa Abeywardena said Keells had been given approval for a $ 850 million deal to build the resort. Shares in Keells ended 2.61% higher at Rs. 252. “The Keells deal gave a boost to the market. It’s the positive news that the market was awaiting and market is up on Keells in thin trade,” a stockbroker said on condition of anonymity. Capital Alliance Research said in a note that the Keells disclosure to the Bourse lacks detail as it was not clear whether the deal has secured a casino license or joint venture partner and the structure of the deal. “If the mixed development does not have a casino, the development is likely to be value destructive,” Capital Alliance said. The index hit a near 10-week low on Tuesday due to concerns over rupee’s weakening trend and possible foreign outflows. Foreign investors were net buyers of Rs. 6.95 million ($ 53,100) worth of shares on Thursday and they have been net buyers of Rs. 15.75 billion in stocks in 2013. Turnover on Thursday was Rs. 241.8 million, well below this year’s daily average of about 1 billion rupees. Stockbrokers said concern over the further weakening of the rupee has dented investor sentiment, with many investors waiting for clear directions on the currency. The Sri Lankan rupee spot ended flat at 130.60 per dollar on Thursday at a near eight-month low, but currency dealers said spot-next eased on exporter dollar conversions. Currency dealers said none of the banks were trading spot after the Central Bank, through State banks, guided the market to hold the rupee at Rs. 130.60. The spot next which traded high of 131.10 during the day due to the importer dollar demand closed at 130.90/131.00 per dollar from Wednesday’s close of 131.00/10.

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